Thursday, June 28, 2012

The NEW D.C. Nonprofit Corporation Act of 2010 overhauls
the laws regarding the formation and operation of nonprofits organized under
D.C. Law. It is the first
substantial change to the D.C. Nonprofit Code since 1962.

The new law replaces the old
law and applies to nonprofit corporations formed under the 1962 D.C. Nonprofit
Code, effective January 1, 2012. It also applies to nonprofits formed
under the pre-1962 D.C. law who have not elected to be covered by the 1962
Nonprofit Code (so-called “Old Act Companies”).

Of particular interest are
provisions requiring that individual members be provided names and addresses of
all members. The new D.C. Nonprofit Corporation Code (the “Nonprofit Code”)
requires that the nonprofit maintain accurate membership lists. Section
29.413.01 requires the nonprofit to maintain a “record of its members, in a
form that permits preparation of a list of names and addresses of all members,
in alphabetical order, by class, showing the number of votes each member is
entitled to cast.” A member is entitled to inspect and copy the membership list
upon giving the nonprofit five days notice the organization must also give
notice of the availability of the list for elections. In each case the
organization may suggest alternative means of communicating with members.

The ramifications of such a requirement are
still uncertain as the law went into effect in January but it should have an
impact on alternate slates and airing of gripes. The law prohibits commercial
use of the list. A summary is found at:http://dcblog.foundationcenter.org/dc-nonprofit-corporation-act-2010/
along with a number of alerts on individual sections.

Because
penalties can be imposed Plexus recommends careful consideration as to how to
comply with the law. While transparency and open communications are always
desirable abuse of such lists is possible. An alternative approach might be for
the organization to create a blog where members can communicate with each other
and the Board if that is acceptable to the members.

Wednesday, June 27, 2012

I was attending a two-day board meeting, a regular gathering of
executives from across the United States.The primary purpose was to debate and formulate national policy
issues.Toward the end of the first day,
as the meeting continued to drift aimlessly, I noticed the man to my left
deftly folding his agenda into ever-smaller geometric segments until a
three-dimensional form emerged.Wonderful origami!He handed me
the finished work and whispered, “This is
the best thing to come out of this meeting all day.”

My attention was riveted on his work, not because it was distracting
and more entertaining than the meeting (although it was on both accounts), but
more because it exhibited the great loss of talent so often designed into board
meetings.I’m not speaking of his talent
for origami, but his experienced talent for analyzing, debating and deciding
important issues.And that talent was
being squandered.This was a CEO of a
sizable organization in a major city whose mind could not be idle and
who found the meeting so numbing his only recourse, besides walking out, was to
make something constructive with the materials at hand.It’s not incidental that it was the agenda he used, symbolizing clearly that
the printed agenda had no value for him except as raw material for
origami.

The point of this story is there was a great opportunity lost.The executive had taken time from his
business to debate and construct important policy.The board had assembled its collective wisdom
to advance the organization.Both parties lost in the exchange.

The second point is that the opportunity was squandered forever.You may say it was unfortunate that some time
was lost, but the reality is that it was an opportunity that was lost forever; one that can never be
recaptured.Every minute spent in a
meeting is either an opportunity gained or an opportunity lost.Foregoing the opportunity is not a
postponement.It is a loss—final.

Why do we permit such loss?Why
do we design such loss into our
meetings?Well, you say, we don’t
purposely set out to waste time and talent.Of course we don’t.But we do
allow meetings to be conducted in ways that are not focused on purpose and
outcomes.Agendas are loosely
constructed (except when they’re fashioned into origami).Discussions are unfocused.Information is presented in time-consuming
and mind-numbing ways. Decisions are often uninformed.Important issues are underplayed or missed
entirely and unimportant issues are overworked.And the result is a meeting that is ineffective and underproductive.

A common complaint heard from volunteer board members is, “That meeting
was a waste of time”.The speaker may be
saying it was a waste of my time; or
we could have done all that in half
the time; or there must be a better way
to do what we need to do.Whatever the
specific meaning, the result is that feeling of loss.And who has time to waste?Who wants to feel that their contribution to
a worthy mission is wasted?And how do
these people talk about the organization to others?

What, then, is the remedy?

We know people want to
contribute.We also know people have the
capacity to do better. What’s missing?Probably it’s little more than the knowledge
of how and where to begin.

Let’s start with giving up what we’ve “always done.”Habits learned from our experiences on
boards, councils, committees, school organizations, clubs, and myriad social
organizations have evolved over 400 years when the first “modern” organizations
emerged from feudalism.Change begins
with leaving behind the old habits.

Let’s start with taking on new practices that advance the
organization and its mission.After all,
the core mission of the organization cannot be well served if the organization
itself is not well served.

Let’s start with redesigning our meetings to recognize and mobilize the
wealth of talent in the boardroom and using it to meet the needs of today’s
organization.

What can we learn from this story, a true-life misadventure?The many forms of origami in the boardroom,
or the mental equivalent, disengaging from the meeting,are signals that
the group is ready to be re-energized.The nurturing of a strong, effective governance function requires
constant work and assessment. Origami is a marvelous talent, but not one to be
displayed in the boardroom.

Monday, June 25, 2012

The importance of successful and reasoned leadership at
executive levels is probably obvious.What may not be so obvious is the type of leadership needed for success
under varying circumstances.For
example, non-profit organizations may face a wide variety of situations,
ranging from a downturn in the economic fortunes of the organization to rapid
organizational growth in new markets.Membership and volunteer participation may be up, down or radically
changing.Competitive organizations and
markets may threaten the future of many non-profits.Internal differences of view may create
crippling paralysis within the organization.These and other challenging situations call for many different types and
experiences in leadership.Where can we
look for examples of successful leadership in challenging circumstances such as
these?

One historical source, full of examples of triumph over
staggering challenges, is the life and achievements of Abraham Lincoln.So much has been written about Abraham
Lincoln that the useful available sources may appear endless.An excellent and instructive work, however, is
Team of Rivals, by historian, author
and Pulitzer Prize winner Doris Kearns Goodwin.

In her book, Goodwin documents the life of Lincoln, his
political rivals for the Republican nomination for President in 1860 and how
Lincoln ultimately won the Presidency when no one expected him to do so.Displaying great vision, courage and
self-reliance, Lincoln thereafter appointed his political rivals to his cabinet
during the turbulent years of the Civil War.Each of these rivals must have felt their superiority to the
inexperienced President, because “they were the strongest men”.In the end, however, it was Lincoln who
became the strongest of them all, and guided the nation through one of its most
troubling and challenging times.

What were some of Lincoln’s leadership strengths that
changed history?Goodwin identifies
these, among others:

Never used
authority or coercion—motivated by communications & infinite patience

Fair--inspired
others to overcome petty rivalries

Excellent
story teller & communicator

Honesty
& integrity

Subordination
of himself to his work

Sense of
proportion & humor

Ability to
rise above personal slights; ability to get along w/persons of clashing
ideologies

Refrained
from turning competitors into enemies

As a non-profit organization CEO (or aspiring one), what can
we learn from Lincoln?If your
organization is diverse and opinion-rich, chances are you have “rivals”, of one
kind or another.Fortunately, few of us
will ever face the extreme levels of leadership challenge faced by
Lincoln.Considering Lincoln’s
leadership strengths and how they were put into practice, however, may enable
all of us to become better leaders, forging important bonds with our own “team
of rivals”,and enabling success
regardless of the challenge.Good luck!

Wednesday, June 20, 2012

Typically organizations spend way too much time,
worry and effort parsing how their multiple constituencies will be represented
in their various governance and operational bodies.It is a thankless task where the end result usually
is a state of tense political gamesmanship and/or stalemate as one group of
constituent interests warily faces off against another.Some people enjoy such games—most do not; and
those in the middle usually are reduced to exasperated cynicism about the whole
process.

Ever since our Eighteenth Century call to arms-- No
taxation without representation!--we have been trapped in the mindset that no
organization can be truly democratic unless all recognizable constituencies
have a seat at the governing table.But
in this new era of Internet-based communities it is becoming increasingly
difficult to determine whose team anyone is on.Do you feel a certain way just because you live in Michigan, or because
you work in a certain industry, or perform a certain job or practice a certain
profession?--perhaps so, but increasingly not.

Traditional lines that used to be convenient for
determining which “side” people are on are blurring.Slowly nations and people and communities are
emerging from our ancient tribal states—call it “the pursuit of happiness,” a
concept made famous by another famous Eighteenth Century document—thanks in no
small part to the freedom the Internet has provided us.In this evolving environment, overarching
strategic purpose becomes key—much more so than the traditional identification
by geographic location.It is what draws
people and companies to membership organizations and it is what motivates them
as donors and engaged members.

So what does “representation” mean in this new
environment?I suggest that when it
comes to board representation the primary criteria are and should be the
background and skills set of the people on the board—do they help advance the
organization’s strategy and the strategic goals that are part of that strategy?This is the only question that matters, everything
else is or should be subordinate to that.

For the organizations that have the best governance
models, service on their board of directors is considered a privilege, not a
right based on what industry segment or geography one comes from. If the organization’s
strategy is achieved then everyone is happy. Strategy is unquestionably predominant.
Board members are selected primarily on their ability to advance that
strategy. The reasoning goes, “You may not be in my segment of the
industry, but if you are helping to achieve the strategy that I deem important
then what does it matter where you come from?” There is a general
recognition within these groups that not all people are able to accomplish the
work that must be done—so leadership selection should be focused solely on
finding those abilities and leadership characteristics that are important for
the successful accomplishment of the organization’s strategy. When the
strategy of the whole becomes subordinate to personal or traditional “tribal”
interests based on more narrowly defined criteria, then traditional “politics”
take over--and that is increasingly unacceptable to the great majority of
people who want and expect something better.

Monday, June 18, 2012

As the chief executive of your non-profit organization it’s
often up to you to define, communicate and lead the efforts for success in your
organization.So, how do you and your
organization define success?It’s hard
to talk about success when there isn’t common agreement and understanding on
what constitutes success.So let’s
investigate how organizational success might be defined.

What does your organization value most?Is it performance?How about customer service and member relationships?Perhaps it’s knowledge-based competencies or
credentialing.Each organization is
different when it comes to what matters most, not to mention why it matters at
all!So, to define success, there has to
be agreement on what matters most.For
example, an association struggling for financial survival may define success
very differently than an association whose growth has been 30% per year for the
past five years.

Here are some important success categories, with suggestions
how they might be used.

Strategy--Does our association
have a sustained record of performance to plan over time (successful
strategy is not measured in 12-month cycles or someone’s personal theme
for the year)?

Voice of the customer—Who are our key
members/customers and how do we know if they are satisfied (yes, there may
be “less important” members/customers)?

Financial—Do we have a record of sustained
performance over time meeting budget or ending each year with positive
variances (no margin, no mission)?

Business operations—What is the
record of new program development and existing program retirement over the
past 5 years (are you still doing what you did 5-10 years ago)?

Learning & growth—What
investment do we make on a consistent annual basis for volunteer &
staff learning and growth in their association roles (no investment, no
dividends)?

When you have figured out what matters most to your
association and how you will measure success, it’s time to think about annual
communications planning and the year’s key audiences and messages.Key messages are important for association
leaders—volunteers and staff—to focus on, repeat and reinforce.The messages help everyone to understand and support
success.

There are many useful ways to define organizational
success.And to communicate effectively
about it.When there is common
understanding about success, your volunteers, staff, customers and business
allies will thank you, knowing what to expect and how to help.How do you define and communicate
organizational success?

Monday, June 11, 2012

Effective governance is a necessity for every
non-profit organization.Just how
effective is your Board and it’s governance? Can your organization’s governance be improved?And made more enjoyable?As the CEO, how can you help your Board
enhance their leadership and communications?

One important place to begin is to recognize what a
vital resource time is. Recruiting new board members is challenging because
volunteers are concerned about drains on their time. Governing well is critical
because a board’s time together is limited. Thus, how you and your board use
your time matters.

Boards that are forward-looking and focused on
strategy, provide the maximum effective (and enjoyable) leadership when time is
limited.Strategic boards spend the
majority of their time identifying broadly important outcomes, setting
priorities, and monitoring the way the staff and other volunteers implement
major initiatives through annual operations.

Here are five steps for an effective, productive, and
rewarding board.

1.Define success. Establish
and practice a shared definition of organizational success. No matter how well an
organization may perform in any 12-month period, if it can’t perform
effectively year in and year out, it can’t really be called a successful
organization. Thus, success has a lot to do with consistency and continuity
over time.

2.Understand your core assets. Every
organization has core assets.Typically
they encompass:1) knowledge, 2)
community, and 3) advocacy. Organizations vary, of course, but these are the
value-added assets common to many non-profit organizations to help accomplish
their mission.Volunteers and staff leaders
must be strategically focused on the development and welfare of these assets which
cause members and customers to value their organization.

3.Think the unthinkable. Ours
is a rapidly changing world in which we face unprecedented competition.To remain both up-to-date and competitive,
focus on and prepare for the unthinkable—both opportunities and threats. Effective
boards consider the one thing that would most revolutionize their organization and
the one thing that would most jeopardize it. Thereafter, boards focus strategically
to realize the opportunity and head off the threat.

4.Set priorities and monitor them. Resources
are always finite—there are never enough. So develop strategic priorities and
communicate what is truly important. To maintain a strategic perspective, boards
must think in terms of strategy:what is important for the organization to
achieve, and leave the operational side of the organization to the
full-time staff and volunteers who are in the trenches. The staff and volunteers of the organization’s operational side
are the ones to be held responsible for planning, budgeting and executing annual
operations.

5.Establish a respectful staff partnership. The professional
staff of an organization offer important resources—so important that it may be
impossible for a board to be truly strategic without them. For example, staff
members may have access to knowledge, contacts, and resources that may be
unknown to a board. The staff is uniquely positioned to help develop and
implement a definition of organizational success that’s built upon consistent
performance, year after year.

Effective boards are both enjoyable and productive
where it matters most:achieving the
organization’s mission.

Monday, June 4, 2012

Resources for CEOs and aspiring
CEOs may be few and far between.In this
article, and for the next several weeks, we will focus on some key insights for
those in the chief executive’s role and those wanting to become a CEO.We start with perhaps one of the most
critical documents:the CEO employment
agreement.Here are fivecritically
important elements, among others, for a supportive and successful term as a
chief executive:

Duties:Are the roles, duties and authority of
the CEO clearly stated?Is it clear
the CEO is singularly responsible for staff, budgets, contracts, and other
operational essentials?Can these duties
be changed, and if so, by whom and how?Are changes (change of duties, change of role or authority,
reorganization, merger, acquisition, cessation of operations, etc)
considered as termination for good reason?

Compensation, benefits
& annual review:What is
the base compensation?What are the
types of variable compensation, e.g., bonus, commission, etc.?Are other types of compensation
appropriate, e.g., one-time (moving, relocation, etc.) and/or recurring
(car, travel, business club, etc)?Will
compensation be established and maintained as “market rate” and how will market
rate be determined annually?Who
participates in the decisions about CEO compensation?Does the association’s standard benefits
package apply to the CEO?How is CEO
annual performance planning and evaluation conducted?Who leads the annual CEO review
process?Who participates in the
process?

Term &
renewal:Is there a reasonable
initial term of employment?When
and how will the initial term be extended or renewed?Who participates in the decision?What if there is no formal action to
renew the initial term—does it renew automatically, or is it considered
involuntary termination?

Termination:How will unfavorable “termination for
cause” be defined?How will other
types of favorable terminations (voluntary, involuntary and for good
reason) be identified and defined?How are the termination definitions linked to compensation,
benefits and any special termination pay-outs, e.g., termination in first
year of employment, termination after first year, involuntary termination,
for good reason, etc.?

Restrictions:Are there personal or professional
restrictions on the CEO while employed, and/or upon termination?For example, can the CEO teach, write,
do research or other similar activities, while employed?Upon termination, can the CEO immediately
work for another association in the same geographical area?Can the CEO immediately approach
employees of her/his former organization about career changes?

Thinking carefully
about these key parts of your CEO employment agreement, and
reaching mutually agreeable resolution with your volunteer leaders will help to
establish your credibility as a senior executive.It will alsomake
your life a lot more enjoyable.Good
luck!

About Me

For health, education, workforce, finance and other non profit and public service organizations that want to leverage resources and strategically plan for U.S. or international market expansion.
Plexus Consulting Group® provides a broad-range of consulting and management services to not-for-profit and public service sectors. We help clients overcome challenge, achieve excellence, and maintain success.
The Plexus team of multilingual, multitalented professionals align themselves primarily among lines of industry specialization, including Globalization, Education, Workforce Development, Healthcare, and Financial Services.